2009-04-16bloomberg.com

Unigestion Holding SA, backed by HSBC Holdings Plc, plans to start a fund to invest in hedge funds focusing on distressed debt as the deepest economic slowdown since World War II leads to rising defaults.

The fund, which will start with $150 million, will invest in “specialized” credit hedge funds “to get the full return of strategies,” said Bernard Sabrier, chairman of the Geneva- based asset manager that oversees about 10.5 billion Swiss francs ($9.2 billion). The fund is set to return at least 20 percent a year.

Hedge funds from Harbinger Capital Partners LLC in New York to 3 Degrees Asset Management Pte in Singapore are starting funds to buy troubled loans and bonds on the cheap. Companies worldwide will default on their debt at a peak rate of 14.6 percent toward the end of this year, Moody’s Investors Service said this month.

And they say no one will buy distressed assets without the government holding their hand?


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